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Greek leaders agree on €11.5 billion of new cuts

Antonis Samaras has convinced his junior coalition partners to drop their objections to further austerity measures.

Greece's Prime Minister Antonis Samaras leaves Maximos mansion after his meeting with the other political leaders of the coalition government in Athens.
Greece's Prime Minister Antonis Samaras leaves Maximos mansion after his meeting with the other political leaders of the coalition government in Athens.
Image: Thanassis Stavrakis/AP

GREEK PRIME MINISTER Antonis Samaras has convinced his junior coalition partners to drop their opposition to a new €11.5 billion package of cuts, as the country continues to struggle to turn its financial circumstances around.

Samaras – who became the country’s prime minister after a first general election in May proved inconclusive, requiring a second ballot a month later – said he had coaxed his left-leaning allies in government into an agreement.

“Cutting public spending by 11.5 billion euros is a prerequisite to keep Greece in the eurozone and to enable further negotiation,” finance minister Yannis Stournaras said after the meeting between the coalition allies.

Evangelos Venizelos, the leader of the socialist PASOK party which led the country into its bailout, but which remains a junior coalition partner, admitted he was not enthusiastic about having to support the measures.

“If the prime minister feels that immediately adopting the measures worth €11.5 billion… will safeguard future loan releases and the country’s place in the euro, I am forced to accept his view,” he said.

Tensions between the parties – which are not normally ideologically compatible, but have been forced together as the only supporters of the EU-IMF bailout – have remained high since the government was formed.

AFP reported that yesterday’s meeting that agreed to the latest €11.5 billion austerity measures was the third coalition meeting in the last week. Yesterday’s meeting coincided with the latest EU-IMF audit of Greece’s affairs.

State television NET reported Samaras as telling his partners that Greece would be “isolated” by its creditors if it failed to make the cuts – but that if it showed credibility, Greece could receive a two-year extension on the loans it has already taken out.

Details of the measures will be finalised by the end of the month, and will hope to “minimise social effects”. The cuts are likely to be enacted over two years, though PASOK had been looking for them to be split over a four-year period.

Read: Spain’s debt: will ECB start buying bonds again?

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Gavan Reilly

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